Wage and Hour Division (WHD)

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SAN ANTONIO -- The U.S. Department of Labor has filed suit against San Antonio-based Kyu Chul Shin, doing business as Ken’s Cleaners, for failing to pay prevailing wage rates, fringe benefits and overtime to 198 current and former pressers, checkers, launderers, cashiers and drivers, as required by the Service Contract Act (SCA) and the Contract Work Hours and Safety Standards Act (CWHSSA). The department’s action is seeking $222,540.

The complaint was filed before the Department of Labor’s Office of Administrative Law Judges. The case results from an investigation, covering a period of more than two years, by the department’s Wage and Hour Division office in San Antonio. The division found that Ken’s Cleaners failed to pay the prevailing wage rate to laborers employed in the San Antonio area on federal contracts. Legal action also has been taken to debar the company from obtaining future federal contracts.

“The company not only failed to pay the prevailing wage rate and overtime but also misclassified employees,” said Cynthia Watson, the Wage and Hour Division regional administrator for the Southwest. “We are pleased that 198 workers will receive more than $222,000.”

The investigation determined that Ken’s Cleaners failed to pay the required wage determination rates, vacation benefits, health and welfare benefits, and overtime for hours worked over 40 in a workweek. Additionally, the company failed to keep accurate payroll records.

Ken’s Cleaners, a laundry and dry cleaning business, had four contracts with the Army and Air Force Exchange Service to provide laundry, dry cleaning and clothing alteration services at Army and Air Force bases in and around San Antonio.

Under the SCA, contractors and subcontractors performing on federal services contracts in excess of $2,500 must pay their service workers no less than the wages and fringe benefits prevailing in the locality. The CWHSSA requires the payment of time and one-half the basic rate of pay for all hours worked more than 40 in a work week. Contractors must ensure that subcontractors are fully informed of the requirements under federal government contract labor laws.

The Wage and Hour Division concluded 31,987 compliance actions and recovered more than $171 million in back wages for more than 246,000 employees in fiscal year 2006. Back -wage collections in fiscal year 2006 represent a 30 percent increase over back wages collected in fiscal year 2001. The number of workers receiving back wages has increased by 14 percent since fiscal year 2001.

For more information about the SCA and other federal prevailing wages laws, call the Wage and Hour Division in San Antonio at 210-308-4515 or the Department of Labor’s toll-free helpline at 866-4US-WAGE (487-9243). Information is also available on the Internet at www.wagehour.dol.gov.

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